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Michael Johnson, CEO, HErbalife

Herbalife Executives Buy $1.7 Million In Shares

 

Insiders at Herbalife threw their hats into the ring of the media circus surrounding the multi-level marketing firm.

Three Herbalife top executives bought 30,700 shares for $1,709,467, an average of $55.68 each, on July 31.

Chief Financial Officer John DeSimone bought 10,000 Herbalife (ticker: HLF ) shares for $555,600. He now holds a direct stake of 28,690 shares. DeSimone's most recent previous transaction was on April 16, 2012, when he exercised options and sold 31,700 shares for $2.7 million, an average of $70.50 each, through a 10b5-1 plan.

Chief Operating Officer Richard Goudis bought 10,700 shares for $597,167. He now holds a direct stake of 166,969 shares. Goudis' most recent previous transaction was on Nov. 29, 2012, when he bought 180,100 shares for $2 million, an average of $43.89 each.

Finally, President Desmond Walsh bought 10,000 shares for $556,700. He now holds a direct stake of 107,599 shares. Walsh's most recent previous transaction was on April 3, 2012, when he exercised options and sold 125,500 shares for $5 million, an average of $69.44 each through a 10b5-1 plan.

All the executives hold stakes of less than 1% in Herbalife.

Walsh and Goudis joined Herbalife in 2004. DeSimone joined in 2007.

Herbalife did not respond to a phone call seeking comment on the buys.

Activist investor William Ackman of Pershing Square Capital Management has been on the attack against Herbalife, spending $50 million in a campaign to discredit the company, according to The Wall Street Journal. Herbalife, meanwhile, has spent $41 million defending itself, including $3.77 million responding to a Federal Trade Commission investigation.

The purchases by the executives come at a particularly pivotal time. Earlier this week, Herbalife missed second-quarter expectations for the first time since 2008.

InsiderScore writes on its site, We acknowledge that Herbalife is a very controversial name and that the buying could be viewed pessimistically.

Jonathan Moreland, director of research for InsiderInsights.com, says in an interview with Barrons.com, It's good to see insiders with operational roles taking some action. This is a pretty straightforward buying cluster that ranks significantly. It's pretty textbook stuff.

Moreland adds, It seems very odd to me that Ackman made such a display in regards to putting his reputation on the line with this one position. Not surprisingly, Ackman holds a short position in Herbalife.

 

 

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